I'm not positive about the error codes but make sure the Nandroid file name does not have any spaces. For the update.zip make sure there are not two update.zip files on your sd card and make sure that the one you are using only has one .zip extensions.

I was able to get it back with the nandroid restore process. update.zip just didn't want to cooperate. I think the problem was I had to many folders in /sdcard/nandroid. I had ultimatedroid 7.5 and 7.8 in there. After I deleted them, so only virgin-oem was there it worked.